MACRA: Down the Rabbit Hole

The regulation is a disaster, says Caroline Poplin, MD, JD

MACRA -- the Medicare Access and Chip Reauthorization Act of 2015 -- is a disaster.

It will take the joy out of practicing medicine without significantly improving patient outcomes (except in a circular way) or reducing cost, by moving medical decisions from the bedside to the C-suite. It benefits primarily the health policy community -- consultants, academics, executives -- who designed it. Ironically, MACRA was one of the few major pieces of legislation in the last few years to pass Congress with bipartisan support.

It pains me to say this. I am a New Deal Democrat like my parents -- I believe government exists to do good things, in particular to protect ordinary workers, consumers, small investors, from the unconstrained power of large corporations, and to make markets work efficiently and fairly.

The ostensible purpose of MACRA is to reduce U.S. healthcare costs -- a worthy objective. However, regulating medical practice in exquisite, deadening detail is surely not the answer. The fact that the proposed regulation implementing MACRA was 962 pages tells you all you need to know. (The final rule, which the Centers for Medicare & Medicaid Services (CMS) issued on October 19th -- was more than 2,100 pages, mainly because it includes comments on the rule and the agency's responses.)

High-Cost, Fragmented Care

There are two serious problems with American healthcare: first, it is the most expensive in the world, by a lot -- whether one measures it per capita, as a fraction of gross domestic product (GDP), whatever. The second is fragmentation of care, due in part to the exponential expansion of medical knowledge in the last 25 years. By comparison, most people believe that the quality of medicine in the U.S. is good, often excellent, if you can get it.

It would seem that the reason healthcare costs more in the U.S. than anywhere else is that we pay higher prices than anywhere else. But members of the health policy community that developed MACRA has a different theory. They believe that, because we pay doctors a fee for every service with a CPT code that they provide (there are many important services that have no CPT code and are therefore not reimbursed), doctors purposely perform and charge for many services of little or no value to anyone: that is, they provide "volume," not "value," despite years of training about appropriate care. The purpose of MACRA is to fix that.

So who, then, determines the value of a service? Normally, in a consumer society like ours, consumers determine value. Indeed, we expect different people to have different values; a free market allows consumers to decide what they value most, and that is what I think most patients do, especially in a system that continually proclaims itself "patient-centered." It is a reckless doctor who talks a patient into a drug or procedure with potentially serious side effects that the patient really doesn't want -- that is a setup for a lawsuit.

However, the authors of MACRA believe in economics. In economic theory, one determines a product's value by how much a consumer is willing to pay for it. Since healthcare consumers rarely pay the full freight (because of insurance), the law discounts their choice. Instead of doctors and patients, MACRA has experts decide what services are most valuable.

Points Mean Bonuses, Penalties

MACRA creates a program called MIPS (Merit-based Incentive Payment System) under which most physicians (and other providers) will continue to be paid fee-for-service (FFS), but their income will be adjusted by bonuses and penalties based on how they score on a 100-point scale. In 2017, points will be awarded as follows:

60 points will be available for successful performance on quality measures (the regulations apparently give us a list of measures to choose from)

25 points will be available for "advancing care information" -- that is, for using your electronic health record (EHR) -- instead of a means, it has become an end in itself

15 points will be available for "clinical improvement activities"

0 points will be available for resource use, that is, keeping costs down. (Points for cost control will go up starting in 2018; quality points will go down.)

This system is supposed to go into effect for 85% of FFS Medicare by the end of 2016. The bonuses and penalties for 2017 will be implemented in 2019 -- up to 4% in bonuses for top performers, and 4% in penalties for the bottom 25%. These bonuses/penalties will increase to 9% by 2022. Congress required MACRA to be budget-neutral, so the bonuses will be paid out of the penalties -- my success requires that you fail. Hardly the best incentive for cooperation and teamwork.

Providers can only receive points for activities that are carefully, correctly measured and documented as structured data in the EHR. The things patients, especially sick patients, want and need most -- empathy, time, concern for their well-being -- count for nothing.

So to be blunt, from now on we are paid only for treating the numbers.

Primary Care Under Fire

All this is aimed particularly at primary care providers, those who are already the most poorly paid, the most hassled group, and yet are considered the linchpin of a high-performing medical system. We can expect the flight of young doctors to procedural subspecialties to continue. And the cost of implementing this extremely complex system will surely offset any cost reduction achieved.

But for the health policy community, MIPS is just a transition to the ideal system, the Advanced Alternative Payment Model (APM), where patients are cared for inside a vertically integrated healthcare delivery system managed by highly-paid corporate executives, reimbursed by capitation, at financial risk for profit and loss: an Accountable Care Organization (ACO) accountable to payers, not patients.

For each patient, the ACO receives a fixed (hopefully risk-adjusted) fee. If the ACO can care for the patient for less, it makes a profit. If he or she requires more care, the ACO takes a loss. If fees are ratcheted down, by definition the payer lowers its cost. But what of the patient?

In every group, a small fraction of patients are responsible for a large fraction of the cost of care. What if there is not enough money to care for everyone? Some patients will have to do without. Who will decide, and how?

To me, this is sub silentio rationing. To others, perhaps death panels.

Instead, we should control prices of drugs and medical supplies, like the rest of the developed world. Respect doctors and patients: they are not economic ciphers. Pay doctors the right fees for the right services -- more for coordination of care (currently unreimbursed), less for ineffective procedures. Reduce fragmented care by requiring all EHRs to be completely interoperable. Let us practice medicine the way we were taught: "To cure sometimes, to relieve often, to comfort always."

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